XIRR/CAGR: Investor's true performance indicator! (2)

Read? XIRR/CAGR: Investor's true performance indicator!

Investor A said: "I have made $100K passive income from the stock market in 2011"
Investor B said: "I have made $250K passive income from the stock market in 2011"

Wow, wow, wow! Did you say that?

You must be impressed by the number! You may actually go and congratulate them, and hoping to learn from them as well.

Sorry to tell you this!

You have been affected by "trigger" number! It is similar to "trigger" words used by SMOL in his sales tactics to earn higher commissions. They are powerful!!! Read? The pleasure of naked skin over leather...

Investment gurus who are conducting investment courses love to use "trigger" number and "trigger" words in their newspaper ads. It will help them to catch lots of potential investors to attend their free previews. During the previews, more "trigger" words and "trigger" numbers will be presented. Soon some attendees will be sucked into it and pay for the course.

As investors, we must learn to be savvy enough and not fall into "trigger" number used by investment gurus who are trying to impress upon us. We must equip ourselves with essential knowledge and skill to better gauge investment performance and read beyond "trigger" numbers and "trigger" words.

It is true that they may have made $100K from the stock market. But, so what? These "trigger" number said nothing about their investing performance. Absolutely nothing! By putting cash or income into their pocket is not the same as getting real return on their investment. Did the investment gurus tell you this? If no, why not?

Why do we invest in stocks?

When we invest in stocks; we are actually investing with expected yield and return; and also to accept the risk of capital loss too. But, we don't expect capital loss when we place a buy order. Nobody with a sound mind will execute a buy order while expecting capital loss upon buying. Nobody!

Investors who are not ready to accept capital risk will continue to stay at the sideline to watch the market actions.

In short, stock investing is about expected yield and return; and acceptance of capital risk so our investment performance measurement must reflect that too.

Yield and Return

When we say return, we are actually referring to Total Return or Total Shareholder Return (TSR)

As investors, we should be using both Yield and TSR to measure investment performance on stocks. We must also know the difference between Yield and TSR.

It is very important to know that. Read? Don't Be a Yield Pig

Did you understand the moral of the story in that article? If not, read again.

Yield measures income or cash received from stock but totally ignore capital gain/loss while TSR takes into account of measuring both yield and capital gain/loss. TSR is a better measurement of a stock investing performance.


For example, when investor A invested $1M in stocks and received $100K in stock dividends.His yield on his stocks investment is 10%

$100K passive income at 10% yield!

Wow, wow, wow! Did I hear you saying that again?

Again, the "trigger" number of $100K and yield of 10% tell us little about investor A's real investing performance.

For example, what if, the market value of his stocks investment has dropped to $800K and that is -20% capital loss even though it is an unrealised loss. But, TSR will measure both yield and capital gain/loss so his TSR = 10% (yield) - 20% (unrealised capital loss) = -10%. 

Despite, putting $100K into his pocket, investors A is actually experiencing negative growth of -10% when that measurement was taken.

In conclusion, by putting cash or income into our pocket is not the same as measuring the true performance on our investment.

XIRR and TSR

What is the key difference between XIRR and TSR?

The key difference is XIRR will include measurement of investment performance over a time period so XIRR is a better option as an investor's true performance indicator.

Have you started using XIRR to measure your portfolio performance? If no, why not? Any good reason for not doing it?

XIRR/CAGR: Investor's true performance indicator!

Read? You Will Never Know It May Make A Difference In Someone's Life or Thinking (3)

Track, measure and visualise

XIRR/CAGR is an investor's true performance indicator. It doesn't lie or mislead us into believing that we are better than the truth.

As of last Friday market closing price:

One year (2011) portfolio, XIRR is negative return of -4.5%! As an investor, this is a terrible return on my money and that is on top of losing the value of money due to this year inflationary rate at  5-6%. This is poor performance, it is F9 even though I was still putting real cash into my pocket. But, over 9 year since 2003, XIRR is +10.6% and over 12 years since 2000, XIRR is +9.5%

It is quite obvious that the current investing strategy may continue to fail in 2012. I may need some twisting in my investing strategy in 2012/2013 since more investors are becoming more gloomy.

Did you track, measure and visualize by XIRR?

It is an important tool to an investor. It is telling you the truth of your investing performance. It may also help you to revise and adjust your investing strategy to meet your investing goals.

Late for stock investing as the path to financial independence

Createwealth8888 was late for party in the stock market

I believe that many of you have started your serious investing in stock market much earlier than me. That is definitely a good head start; but late starters may not really lose out. Don't worry even you are in your 30s or 40s. You may still make it before turning 60.

Actually, I was rather late for serious business in the stock market. It was only after reading the book "Rich Dad, Poor Dad" that I realised that I needed to free myself from the "bondage" of employment and get out of rat race as soon as possible. I have very strong belief that stock market might be the only way to help me to reach that goal - financial independence earlier. But, then I was already 43+. Could I still make it? I will post an update on my investment marathon race (2003 - 2011) on 30 Dec 2011 which is the last trading day for 2011 and the race will be ended. It is long investing journey indeed. Lots of joys and pains too.


Read? Mind Flip (3)

Sembcorp Marine secures US$291.6m contract

 SINGAPORE - Singapore's Sembcorp Marine, the world's second largest rig-builder, said on Thursday that its unit has secured a US$291.6 million worth of contract to build an accommodation semi-submersible rig with options for another two units.

Salary outlook still positive despite subdued economy: survey

By CARINE LEE


Salary increments in Singapore will remain positive in the coming year despite the less optimistic outlook, said Hay Group on Tuesday.

The global management consultancy expects average salary increases in 2012 to be on par with the actual average salary increases in 2011, which stood at 4.4 per cent, excluding pay freezes.

'Traditionally, the market trend around actual and forecast for salaries indicates a higher salary forecast for the following year. This time around, we've observed that the forecast is stagnant,' said Victor Chan, regional general manager, Singapore and Asean for productized services at Hay Group.

The average variable bonus payout for the coming 12 months is also expected to remain unchanged from the 2.7 months bonus in 2011, which is slightly more than the average increase of 2.3 months in 2010.

Hiring in the new year is expected to reflect the downward business sentiment. The number of organisations that plan to increase staffing levels by 5 to 10 per cent has dipped to 46 per cent from 62 per cent a year ago.

Mr Chan encouraged companies to focus on increasing workforce productivity to sustain performance in the uncertain economic climate.

The figures are based on the Hay Group report, Bracing for an unpredictable economy, which surveyed more than 480 private and public-sector Singapore-based companies in September 2011.

SEMBCORP OPENS AWARD-WINNING INDUSTRIAL WATER RECLAMATION PLANT IN CHINA

- The project completes Sembcorp’s environmentally friendly “closed loop” water management model in the Zhangjiagang Free Trade Port Zone

- Award-winning project is a G-to-G showcase for best practice in integrated industrial water management

ZHANGJIAGANG, CHINA, December 13, 2011 – Sembcorp today opens its first industrial water reclamation plant in China capable of producing 20,000 cubic metres per day of industrial water and up to 4,000 cubic metres per day of demineralised water for supply to customers in the Zhangjiagang Free Trade Port Zone. The RMB106 million (S$21.5 million) facility has the unique capability of producing industrial water using treated effluent from Sembcorp’s centralised industrial wastewater treatment plant in the zone, thereby promoting water reuse and environmental conservation.

With this facility, Sembcorp’s total investment in the Zhangjiagang Free Trade Port Zone amounts to approximately RMB320 million (S$64.9 million). Sembcorp now manages the entire water cycle of the free trade port zone, providing total water and wastewater management solutions to its customers. Sembcorp’s total water solutions not only help its customers comply with discharge regulations and limit environmental impact, but also promote the reuse of water, closing the “water loop”. This total water management model reduces liquid discharge and conserves precious water resources, and represents a significant advancement for the water management industry in China.

At the same time, Sembcorp’s industrial wastewater treatment facilities are capable of treating highly concentrated wastewater with chemical oxygen demand of up to 14,000 milligrammes per litre directly from source, without requiring its customers to invest in pre-treatment facilities.

For this innovative model, Sembcorp’s Zhangjiagang facilities have been selected by the governments of Singapore and China as G-to-G showcases for bilateral cooperation in water management, and won prestigious Honour Awards at both the East Asian and Global International Water Association Project Innovation Awards in 2010.

Talent and Investing??

Just For Thinking ...

Actually, those who have good talent should use their talents to make more and more money as employers, customers and businesses are willing to pay more for such talents. How about those who are less talented? No way employers, customers or businesses will pay more for less talented ones; and less talented will not move up the corporate ladder too. So how?

I am such example of less talented ones. I have no other choice; but to turn to the stock market to make good. Bo pian!

Everybody loses money in the market. EVERYBODY!

Just for Thinking ...

But, I tell you who doesn't lose money in the market. There are two groups of people who don't lose money in the market.

No 1: You turn to daily newspaper ads on investment and trading courses.You will find them. Some will admit that they have lost money; but after going up to the high mountain somewhere, the Mountain God or Goddess have imparted to them some magical powers or weapons that they no longer lose money in the market. They can slaughter the Demons of the market at their will and they have set up altars for you to worship them by parting some of your hard earned money of course and not by mere token donations. Respect, respect, respect hor!

No 2: You often hear them at forums, cboxes, and in the cyber space, the Hoalian royal patron of KopiTIAM and BreadTALK. Lose money TIAM TIAM. Make money TALK TALK.

Track, measure and report it as it is

Why it is so difficult to do it?

It is our human nature to Hoalian and quite difficult to overcome losing face mentality. Especially, when Asian common folks wisdom is we hate to lose face and Teochew got licence to Hoalian? I heard it from my Teochew parents. True or not?

But, once we come to term and accept the truth and reality of the market that everybody loses money in the market; nobody can escape from it. We should be able to track, measure and report as it is since we have accepted losing money is part of the game.

For measuring, we should use XIRR to measure the long-term performance of our portfolio (stocks and cash holding) over market cycles and use ROC to measure the performance of our stocks pick.

Numbers seldom lie unless it is a fraud!

My next investment marathon race (2012 - 2021)

When one door shut, another door opens.

The current investment marathon race (2003 - 2011)

Track, measure and visualise. The lesson learnt is too obvious. Why the target is not achieved?

The next investment marathon race (2012 - 2021)

The stock market is self-learning and ever changing, will the next race be more difficult to run?

When one race ends, the next race begins.

Defensive stocks???

Just For Thinking ...

Does defensive stock exist in the stock market? e.g Singtel, starhub, sph, singpost, smrt, etc

Or investors have confused dividend yield or income stocks as defensive stocks? You see how the stock price of singpost has fallen. Scary hor. Hardly defensive.

Home for Living and not for profit taking (7)

Read? Home for Living and not for profit taking (6)

 

Warren Buffett's Home

Warren Buffett the Worlds 3rd richest man with $ 47 billion dollars still lives in the same house in the same Happy Hollow neighborhood where he bought the home in 1958 for $31,500. It has 5 bedrooms, 2.5 bathrooms and is 6234 square feet, the house was built in 1921. In 2005 it had a taxable value of $ 690,000.

Createweath8888:

This man teaches the greatest lesson in the concept of  "Home is for Living". A home is for personal and family comfort living; it is your nest and anything beyond that is just for showing off. 

Mark to market value? So what? Why should I bother?

Just for Laugh ...

As part of Teochew marriage, the bride will receive four pieces of gold jewelleries so do I need to bother with the market value of these few pieces of gold in the drawer?

There are things in our life that have good market value; but we just no bother to mark them to their current market value. Are you selling for profit? No right? So why bother? May be these gold jewelleries will be in our coffin like my mum's four pieces of gold jewelleries. To be burn away!

How about your castle?  Do you mark it to market value? I don't!

Running this investment marathon race - poor performance and a drop-out!

Another 15 trading days to go and I don't expect any drastic change to happen before year end so I will run this investment Marathon race from 2003 to 2011 with poor finishing and dropping out of the race at half-marathon mark.

CapitaLand's unit rids high-tech industrial site/building for S$99m

By YEO AIQI

CapitaLand Limited on Thursday announced that its unit, Corporation Place Limited, has divested a 30,787 sq metre plot of land and 7-storey high-tech industrial building at 2 Corporation Road, Singapore 618494 for S$99 million.

The book value of the property as at Nov 30, 2011 was S$79.2 million. CapitaLand is expected to recognise a gain of about S$14.5 million.

The divestment will help CapitaLand unlock the value of non-core assets and recycle capital.

The divestment is not expected to have any material impact on the net tangible assets or earnings per share of the company for the financial year ending Dec 31, 2011.

Rotary, Msia's Benalec in deepwater oil storage terminal jv

By ANGELA TAN


Benalec Holdings Berhad and Rotary Engineering Limited jointly announced today the signing of a Memorandum of Understanding (MOU) to develop an independent deepwater storage terminal for oil products in Tanjung Piai, south-western tip of Johor, Malaysia.

With an initial capacity of 1 million cubic metres, with subsequent phases to increase capacity to 3 million cbm on the total reclaimed land area of 250 acres, the proposed terminal will be a petroleum storage facility for storing, blending and distributing crude oil and its derivatives.

The integrated storage facility will be completed with deepwater jetty facilities capable of handling very large crude carriers (VLCCs).

The two companies will jointly embark on a technical feasibility study, after which they will form a joint venture company by participating in taking equity ownership and development of the first 1 million cubic metres oil storage terminal as well as other terminal projects.

Can you ever swing your club like Tiger Wood?

Just For Laugh ...

Seldom we will hear "retail" golf players quoting Tiger Wood or saying let us all swing like Tiger Wood. It is almost an impossible dream.

But, when it comes to investing, we hear until sianz. So many retail investors like to quote Warren Buffet, Donald Trump and Li Ka Shing, etc. It doesn't seem to be an impossible dream. How come?

Ride motor-bike risky? No risk, no risk, no risk

Read? Minimise risk by picking the rider who is more likely be cautious

I was asking my married colleague who have young kids why he is still riding motor-bike?

It is common folks wisdom that riding on motor-bike that does not support by itself on two wheels is a dangerous act to perform on the road. Most of the time, motor-bike riders got killed not due to their own mistakes but due to other road users' mistakes. My colleague replied that he is very careful and confident; and he thinks that he handles his bike well and feel safe. One can feel safe  but that doesn't really take away any risks. Absolutely nothing!

Same as investing in stocks. There are some common folks wisdom on risks like speculating heavily on S-chips; investing heavily into one counter or one sector, or using highly leveraged instruments to speculate to become rich faster. So are you motor-bike rider in the stock market?

Minimize risk by picking the rider who is more likely be cautious

Just For Laugh ....

During my younger days, taking motor-bike as pillion rider was common thing to do when we went outing with friends. Quite often, those who rode motor-bike would take one of their friends as pillion rider home. I was super kiasi. I would only pick rider who was married with kids. They were likely to be cautious on the road as they can't play play with their life.

Even now I still have same mindset when I come to stock market as pillion rider. I still pick the same type of riders.

CapitaLand to dispose of Shanghai CapitaLand for US$99.75m

By CARINE LEE


CapitaLand Limited on Tuesday announced that, through its wholly-owned subsidiary, Yorksure Pte Ltd, it will dispose of its entire stake in Shanghai CapitaLand Xin Chuang Real Estate Development Co Ltd (SCXC) for 852 million yuan (US$99.75 million).

SCXC's sole asset is a 71,613 sqm property, in Zhabei District of Shanghai, China, which is currently under construction.

CapitaLand's carrying value of the sale stake based on the management accounts of SCXC as of October 31, 2011 was 600 million yuan. CapitaLand is expected to recognise a net gain of approximately S$40 million upon completion of the sale.

The sale is subject to approval from the Chinese government and is expected to take place by the first quarter of 2012.

The unrelated buyer has paid 10 per cent of the consideration and will pay another 30 per cent within two days. The remaining 60 per cent will be paid upon completion of the sale.

The sale is part of the group's ongoing strategy of capital productivity, it said.

CPF OA

Just for Laugh ...

When I was younger I was like .. wtf.... keeping my money for what? I know to generate better return.

But, when I am 55, I like CPF OA better as it has become a Commondo base camp earning 2.5% return while platoons of soldiers are resting for the next major battle.

Insurance, Leverage, and Peace of mind.

Read more? Past postings on Insurance


Insurance

Why are we paying premiums for insurance?

It is the fear that drives us to seek protection. It is paying money for protection.

We fear and seek protection against specific unexpected high financial losses coming from some unforeseen life events by paying premiums to insurance companies for them to take it away from us. So, in fact, we are just transferring this risk from ourselves to someone else so that we can have peace of mind and sleep well at nights with one thing less to worry.

Life with less things to worry will be easier to catch more moments of happiness.

Read? Four Pillars in our life to support our happiness index

Leverage

Read? Playing The Game of Leverage (11) - Win Big or Lose Big

I believe most people will sensibly leverage themselves within their financial strength and avoiding taking too much risks as they still want to sleep well at nights. Who will want more things to worry and keep awake at nights?

Then how did some people get themselves so highly leverages and go bankrupt after a series of bad investment failures?

The greed in these people may have slowly strengthen up to drive them to see more "opportunities" to make more money but overlooking their associated risks. More opportunities taken may actually translate to higher risks exposure. No meh?

BTW, who don't want more money?

Most of us like to believe that our mind is strong and sensible enough to control financial losses from escalation, able to cut losses fast, and prevent taking us towards the path of bankruptcy.  Unfortunately, in reality, many more can't.

Chinese has a saying "Lose until mad!" and it is true.

When someone loses so much money and once that level of sanity has breached; madness will take over one's mind and that will probably explain why some people can leverage so much and take so much risks far far beyond their means to do so.

Conclusion

The key here is unexpected high financial losses and protection against it.

In insurance, we pay for that peace of mind and we know it is worth paying for. Similarly, in investment we too can leverage for much larger financial gains; but at what price will we be paying for that same peace of mind that has been already paid for through our insurance premiums. Don't understand? or too cheem?

Reits and their rights issues: How you initially react when you first hear it?

There are too many articles on reits and their rights issues recently. May be after reading all these articles, some of us may become more confused over the issues.  Actually, there is only one issue here with reits and their rights issues. How you initially react when you first hear the news of your reit announcing rights issue?

Did you say knn? Did you say sianz? Did you struggle to get money to participate? Did you sell the nil-paid rights because you have no more cash to participate?

Yes to any of the above questions; then reits may not be the right dividend play stocks for you. Look elsewhere. The market is never short of good yield stocks. Only you are short of patience and gut.

I have some money rotting in the bank. Can you help me?

Just For Thinking ...

I often observe that some people are asking similar question in financial educational forums or blogs : "I have some money rotting in the bank. Can you help me?"

It is like going to your GP and ask:"Doc, I am not feeling well. Can you help?"

It is more important to ask yourself one question before going around asking others for financial advice.

Without knowing why are you keeping money in the bank; most likely these bloggers will give you motherhood statement responses. It is not going to be helpful to you.

That one question that you must ask yourself: Do you foresee the need to use up most of your money (e.g. 80-90%) in 1-2 years?

If yes, then losing the value of your money due to inflation may be better than taking the risk of losing your money to other market players. Time in the market can be your friend and your deadly foe.

Rotting or losing? Think again!

Read? Saving, Lending and Investing (2)

Generally, we save for use and we invest with a purpose. Understand? Too cheem?

The Hen & the Pig Go To Breakfast

A Hen and a Pig were sauntering down the main street of an Indiana town (yes, this is another shaggy dog story!) when they passed a restaurant that advertised “Delicious ham and eggs: 75 cents.” “Sounds like a bargain,” approved the Hen. “That owner obviously know how to run his business. “It’s all very well for you to be so pleased about the dish in question,” observed the Pig with some resentment. “For you it is all in the day’s work. Let me point out, however, that on my part it represents a genuine sacrifice.”

Same as investing in the stock market. When you saw your favourite Hen (Your favourite finance or investment bloggers) entering a stock that sounds like a bargain.

Do you quickly follow and jump in too?

But, don't ever forget that you might be the Pig, Get it?

Read more? Does Your Account Size Matter? - Part 3

Kep Corp

Biosensor

Shandong Weigao exercises Convertible Notes and becomes Biosensors’ single largest shareholder

Singapore, 30 November 2011 ‐ Biosensors International Group, Ltd. (“Biosensors”, “Company”, Bloomberg: BIG SP) today announced Wellford Capital Limited, a wholly‐owned subsidiary of Weigao International Medical Co. Limited, which is in turn a wholly‐owned subsidiary of Shandong Weigao Group Medical Polymer Company Limited (“Shandong Weigao”) has fully exercised its rights in converting the US$120 million principal amount of 4% convertible notes due 2014 held in Biosensors.

As a result, Shandong Weigao will become the single largest shareholder of Biosensors with 370 million shares, or approximately 21.6% of the Company.

----------------

Createwealth8888:

due 2014. Why convert so early?

Unbearable feeling?

Just For Thinking ...

As young retail investors or just having a few years into the stock market, you may already have investing goals and time frame in your mind to do well. To reach that investing goals within that time frame, you may also know that you will need to focus on the higher rate of growth of money in your investing strategy.

However, the reality of the market cycles has caused too much volatility in growing your money and has often triggered moments of unbearable feeling that chasing higher rate of growth is not comfortable or suitable for you.

It is never easy to live with the volatility of growth in money. Even harder for someone to teach you to do that and you have to learn it yourself and in your own way if you don't want to risk missing your investing goals within your own time frame.

Olam to set up US$49m rice farming and milling facility

The facility, located in Nigeria, will see operations commence in 2012


By FELDA CHAY

OLAM International is investing US$49.2 million in its first rice farming and milling facility, which it said will be located in Nigeria and will deliver an internal rate of return (IRR) of 28 per cent.


One analyst noted that the IRR is high, but said the project also carries high risks.

'There is no free lunch,' said OCBC Investment Research's Carey Wong. 'Agriculture is subject to issues such as pests (wiping out crops), diseases and bad weather. There are also political risks in Nigeria.'

Olam said in a statement yesterday that it will start rice planting during the April-June period, its last quarter for FY2012.

The facility will begin to generate revenue in FY2013, and will be fully operational by FY2016.

The 6,000 hectare farm in Nasarawa, one of Nigeria's main rice growing belts, is expected to yield 36,000 tonnes of milled rice annually at its peak, and will be sold through Olam's distributors and dealers across Nigeria, where it already has a presence.

UOB-Kay Hian analyst Eugene Ng said that the farm will likely raise profit margins for Olam's rice operations, but that it is likely to be a 'very tiny' increase.

The company currently works with several rice farms, but does not own any of them. It is among the largest rice traders globally.

The company's investment in rice farming in Nigeria comes at a time when the government has pledged to raise rice production in the country - said to be among the world's largest consumers of rice.

Nigeria consumes about 5.5 million tonnes of the commodity each year, of which 1.9 million tonnes are imported.

'Globally, land under rice cultivation has remained stagnant around 150 million ha over the last 30 years,' said Rajeev Raina, president of Olam's rice business. 'With the growth in population not being accompanied by an increase in the area under cultivation, we have seen a lot of pressure in respect of global rice supplies with growing countries either banning exports altogether or increasing the support prices of farmers, thereby increasing the selling price of milled rice in the international market.'

Mr Raina added that Olam's investment in rice farming and processing in select markets, while helping the importing countries in their import substitution efforts, 'would also help us to selectively get integrated in the value-chain by participating in attractive and higher margin profit pools upstream in rice farming'.

Olam said that it would fund its investment through a combination of internal accruals and borrowings.

Last month, the group announced a 15.1 per cent year-on-year jump in first-quarter net profit, with an overall rise in sales volumes helping to lessen the impact of lower net contribution from its cotton business.

Olam to invest US$50m to expand Nigeria flour mills

By CARINE LEE


Olam International Limited on Friday announced plans to expand its wheat milling capacity at Crown Flour Mills in Nigeria for a total outlay of US$50 million.

'The addition of two swing mills will enable us to produce both standard flour / semolina or a special blend of flour and semolina for manufacturing pasta,' said K C Suresh, president for the grains business.

The project is expected to deliver a 20 per cent return, it said.

S'pore employment rate hits a new high

Job rates this year rose to 78 per cent while median monthly income up by 8.3 per cent


04:45 AM Dec 01, 2011SINGAPORE - As employment hit a new high of 78 per cent for the resident population this year, nominal incomes also rose strongly amid a tighter labour market, even with sustained pressure from inflation this year.


The median monthly income from work (including employer Central Provident Fund contributions) of full-time employed residents rose by 8.3 per cent over the year to S$3,249 this year, higher than the 2.5-per-cent growth registered last year, said the Manpower Ministry (MOM), which released findings from its Labour Force Survey yesterday.

Taking headline inflation into account, the median income rose in real terms by 3.1 per cent this year, after a slight dip of 0.3 per cent last year.

While the median monthly income of full-time employed residents rose 11 per cent over the last 10 years or 1.1 per cent per year, incomes at the bottom 20 per cent rose only 2.6 per cent over the same period, or 0.3 per cent a year, factoring in headline inflation.

For this year, the employment rate reflected both the high labour force participation rate and a lower unemployment rate, said the MOM.

And with the immigration framework tightened, "growth in the resident labour force moderated this year, reflecting the absolute decline in number of permanent residents in the population".

The number of permanent residents in the population fell by 1.7 per cent over the year in June this year, after growing 1.5 per cent last year and 11.5 per cent in 2009.

"Good progress" was made in the employment rate for older residents: A record 61.2 per cent of residents aged 55 to 64 were working last year, up from 59 per cent a year ago.

The employment rate for men in this age group rose from 75 per cent to 76.4 per cent, and from 43.4 per cent to 46.3 per cent for women.

In the prime-working age group of 25 to 54, women saw employment rate reach a high of 73 per cent this year, up from 71.7 per cent a year ago.

The men, on the other hand, clocked a modest increase from 92.4 per cent to 92.6 per cent, still lower than the pre-recession high of 93.3 per cent in 2007.

More residents were employed in both professional, managerial, executive and technician (PMET) and non-PMET jobs this year, with growth in the PMET group outpacing the non-PMETs at 2.2 per cent compared to 1.5 per cent for the latter.

With the sustained job creation, unemployment declined further, with the resident unemployment rate fell to a non-seasonally adjusted 3.9 per cent in June, from 4.1 per cent a year ago, and 5.9 per cent in June 2009.

This was among the lowest unemployment rate recorded for June periods in the past decade, said the MOM.

There were 2.08 million residents in the labour force as at June this year.

The MOM said 66.1 per cent of the resident population aged 15 and over were either working or actively seeking work in 2011, similar to the record 66.2 per cent last year and higher than 64.4 per cent in 2001.

Insurance is not a necessity

Read? Insurance - Human Asset and Liability - Part 4


Read? Insurance is not a necessity

Lian Beng wins S$98m worth of deals from unit, HDB

By YEO AIQI


Lian Beng Group Ltd on Tuesday announced that its unit, LS Construction Pte Ltd, has secured contracts worth about S$98 million.

They are S$13.2 million contract from Housing and Development Board, Singapore (HDB) and S$84.5 million contract from Lian Beng Centurion (Mandai) Pte Ltd (LBCM), a subsidiary of the company.

HDB's contract is expected to be completed by September 2013 and comprise of proposed building works at Tampines Neighbourhood.

LBCM's contracts comprise of proposed erection of a 10-storey ramp-up factory at Mandai Estate and due to be completed by May 2013 and two blocks of 12-storey independent worker's dormitory development at Mandai Estate. The latter is due to be completed by May 2013.

The HDB's contract is expected to have a positive financial impact on the net tangible assets per share and earning per share of the Group for the financial year ending May 31, 2002.

The LBCM's contracts are not expected to have a material financial impact on the net tangible assets per share and earning per share of the Group for the financial year ending May 31, 2012.

REITs and rights issues: Dilutive or not? (2)

Read? REITs and rights issues: Dilutive or not?

Investor A's ROC will be dilutive relative to Investor B's ROC

No need to manipulate the numbers.

Just try to key in any reasonable number for earning, nil-paid rights, discount rate etc into the worksheet and the result will always be the same. ROC of Investor A will always be lower than the ROC of Investor B. Maths is not biased when the same set of numbers is applied to both investors.


Let continue with the Maths:

Assuming Investor A will always sell his entitled nil-paid rights and Investor B will always fully subcribe for his entitlement of nil-paid rights.

After three rounds of cash calls, relative difference in ROC between Investor A and Investor B is slowly becoming more obvious.

The rights exercise price is $0.90 i.e. 10% discount to the current price at $1 and current dividend yield at $1 is 10%.

How high can one resonably expect to sell nil-paid rights in the stock market?


$0.04?

$0.05?

-CapitaLand, Temasek unit in $3.3 bln west China development

SINGAPORE, Nov 29 (Reuters) - The Singapore-led group that won a tender for a large site in the western Chinese city of Chongqing will spend a total of 21.1 billion yuan ($3.31 billion) on what it hopes will become one of the most prominent projects in China, lead developer CapitaLand Ltd said on Tuesday.


CapitaLand, together with shopping mall arm CapitaMalls Asia , announced earlier on Tuesday that they were part of a consortium that had been awarded a 91,783 square metre site next to Chongqing's central business district for S$1.28 billion ($985.30 million).

Capitaland and CapitaMalls will each take 25 percent of the river-front project, while Singbridge Holdings, a unit of Singapore state investor Temasek will hold 30 percent.

The remaining 20 percent will be held by an unnamed party.

Capitaland beat five other parties in a closed tender where the design was a factor in choosing the winner, CEO Liew Mun Leong said at an analyst and media briefing.

Designed by architect Moshe Safdie, the planned development will include a shopping mall and eight towers for residential, office, serviced residences and hotel use with a total gross floor area of 817,000 square metres.

A "sky deck" will connect four of the towers, similar to the Marina Bay Sands casino-resort in Singapore which was also designed by Safdie.

"We are very confident this will be a must-see site for anyone coming into western China," said CapitaLand chief operating officer Lim Ming Yan.

DBS LAUNCHES FIRST-EVER SUPPLIER FINANCING PROGRAMME FORSINGAPORE RETAIL SECTOR

Continues to execute against strategy to build regional GTS franchise; groundbreaking deal with Dairy Farm Singapore may benefit thousands of companies

SINGAPORE, 29 November 2011 – DBS Bank today announced that it has entered into a supplier financing programme with leading retail group, Dairy Farm Singapore, the first such programme for the retail industry in Singapore. This groundbreaking supply chain financing initiative also underscores DBS’ leadership in providing working capital solutions for enterprises across Asia.

The supplier financing programme is an innovative working capital solution which will deliver efficiencies in the end-to-end process of the supplier to buyer operating model. DBS has worked with Dairy Farm to customise a programme that will provide significant financial benefits to its suppliers and deliver a more efficient and secure process to support the supply chain. Dairy Farm operates 818 retail stores in Singapore under the well-recognised brand names of Cold Storage, Market Place and Shop N Save supermarkets, Giant hypermarkets, Guardian Health and Beauty chain and 7-Eleven convenience stores. As one of the biggest retail chains in Singapore, Dairy

Farm also operates one of the most complex producer to consumer business models with its large supplier network encompassing an enormous range of individual products.

The supplier financing programme is another of DBS’ new and innovative products designed to support its customers by increasing cash flow and reducing operational expenses. DBS is in the process of launching similar supply chain financing programmes across China, Hong Kong, Indonesia, India and Taiwan.

REITs and rights issues: Dilutive or not?

Assuming 1 for 2 nil paid rights issue at 10% discount at $0.90 and nil paid rights can be sold at $0.02 in the stock market to reduce holding costs and stock can be purchased at $1.

EPS at $0.1 at 100% payout for DPS at $0.1 so the dividend yield at $1 purchase price = 10% ROC

Here is the Maths.

No point guessing or debating. See the Maths. See the truth for yourself.  Dilutive or not?

Investor A

Investor A has 10,000 shares but has decided not to subscribe for his entittled 5,000 nil paid rights issues. He then sold them at $0.02 and collected $100 as profit. After the sales of  his entitled 5,000nil paid rights, his invested capital for holding 10,000 shares has dropped to $9,900 as he used his $100 profit as cost reduction for holding 10,000 shares.

Investor B

Investor B has 10,000 shares and has decided to fully subscribe for his entittled 5,000 nil paid rights issues for $4,500 so his new invested capital for holding 15,000 shares has increased to $14,500

Dividends after right issues for the total enlarged shares of 150,000

Let see what happen?

Assuming the earning has increased from $10,000 to $14,500 for the enlarged shares of 150,000 as the company has successfully deployed the additional capital to earn more. But, due to enlarged share base of 150,000, the EPS has reduced to $0.0967. With 100% payout, the DPS is also at $0.0967.

ROC of Investor A for 10,000 shares = $967/$9,900 = 9.76%
ROC of Investor B for 15,000 shares = $1,450/$14,500 = 10.0%


Dilutive or not?

Need 1-to-1 tuition at ToastBox?  Order Laksa set with kopi-o hor.

Sabana Reit to acquire industrial building for S$14.8m

By CARINE LEE


Sabana Shari'ah Compliant Reit on Monday announced that it had on Nov 25, entered into a sale and purchase agreement for the proposed acquisition of a three-storey general industrial building located at Woodlands Loop.

The 77,544 sq ft property, which Sabana Reit will purchase at S$14.8 million, is a JTC leasehold estate of 30 + 30 years tenure commencing from September 16, 1994, with a remaining tenure of approximately 43 years. Sabana Reit has paid a cash deposit of S$148,000 into an escrow account.

The proposed acquisition, to be financed by debt, is part of the Reit's investment strategy and provides improved asset diversification to benefit unitholders.

Upon acquisition, Sabana Reit will enter into a lease agreement with the existing tenant for a term of three years.

The seller, Winstant & Co Pte Ltd, has agreed to provide rental income support, subject to an aggregate maximum sum of S$958,058, for three years.

Record Black Friday weekend sales in US

WASHINGTON: Americans shrugged off economic gloom to post record Thanksgiving weekend sales of $52.4 billion, the National Retail Federation said on Sunday, as shoppers prepared for "Cyber Monday" online deals.


Sales over the long holiday weekend were up 16 percent compared to last year, marking the biggest dollar amount ever spent over the Black Friday period, the unofficial start of the Christmas shopping season, the NRF said.

"Stuffed to the brim from their holiday meals and eager to shop, more consumers than ever turned out for retailers' Black Friday promotions, a promising sign for the economic recovery," said NRF president Matthew Shay.

"After an historic holiday weekend, retailers know the holiday season is far from over and will continue to look for ways to excite holiday shoppers and build on the momentum we've seen thus far."

The average holiday shopper - 226 million of them visiting stores and websites this weekend, according to the association's survey - spent $398.62, up from $365.34 last year.

Meanwhile, Internet sales also jumped for the year, according to an IBM Smarter Commerce survey, which reported a whopping 39.3-percent increase in online Thanksgiving spending.

Consumers were likely to continue the trend on Monday, known as "Cyber Monday" for the deep discounts offered on Internet retail sites - with 37.8 percent of total weekend spending already made online.

"We are anticipating a very strong Cyber Monday," NRF vice president Ellen Davis told reporters in a conference call about the survey, which included figures for Thursday, Friday and Saturday, and projected spending for Sunday.

Davis warned against over-optimism, saying that similar Black Friday figures were seen in 2008 during the recession, but afterwards, "nobody shopped for the rest of the holiday season."

Shoppers mobbed malls and went online in droves to snap up bargains late Thursday, through the night and into Friday -- an annual sales ritual that marks the start to the end-of-year shopping season relied on by many retailers.

The stampede for deeply discounted goods was fed by aggressive marketing, with many stores this year moving up their sales launches to intrude on Thursday's Thanksgiving holiday, and carry on through the weekend.

The orgy of consumption was marred by a number of isolated violent incidents. One woman pepper-sprayed other shoppers at a Los Angeles-area Wal-Mart, while there were several shootings at stores across the country.

Sears opened Thanksgiving morning - traditionally a time when families gather for quiet get-togethers - and Toys "R" Us opened at 9:00 pm on Thursday.

Wal-Mart's big discount rival Target upset some employees by opening doors at midnight on Thanksgiving.

John Squire, chief strategy officer at IBM Smarter Commerce, said this year "marked Thanksgiving's emergence as the first big spending day of the 2011 holiday season with a record number of consumers shifting their focus from turkey to tablets and the search for the best deals."

The momentum "continued into Black Friday where the big winners were those retailers that delivered a smarter commerce experience with compelling, relevant deals that people could easily access from their channel of choice," he added.

Neel Grover, the president and CEO of online seller Buy.com, which offers consumers links to more than 4,000 top retailers, said his firm's "initial holiday results point to a strong start of the season."

- AFP/de

Portfolio Management - Portfolio Risk (3)

Read? Portfolio Management - Portfolio Risk (2)

You must understand this.

A well diversified portfolio across a few sectors is not about loss protection since a well diversified portfolio will also suffer losses in a bear market. But, we don't want one or two counters in our portfolio to cause a huge damage to it and then it can become too difficult to recover without adding new capital into our portfolio.

Read? The Cruel Math of Big Losses - II

The Reit myth busted

Whatever Reits pay out in dividends, they will take back a few years later in the form of rights issues


By TEH HOOI LING

SENIOR CORRESPONDENT

THE high yields of real estate investment trusts (Reits) are tempting. And indeed, they have been touted as a relatively safe and stable instrument to own if one is looking for a steady stream of income. As such, many investors see Reits as a good asset class to have in one's retirement accounts.

But you know what? That Reits are good income-yielding instruments is but a myth. The thing is, whatever they pay out in dividends, they will take back - all and more - a few years later in the form of rights issues.

Here's what I found. Of the 17 Reits which have a listing history of at least four years on the Singapore Exchange, only three have not had any cash calls or secondary equity raising. The remaining 13 have had cash calls, and many had raised cash multiple times. One had a few rounds of private placement of new units which diluted the stake of existing unitholders somewhat.

For many of these Reits, the cash called back far exceeded the cash received. So, the myth of Reits as almost comparable to a fixed income instrument is really busted.

Take CapitaMall Trust (CMT) which was listed in July 2002. Assuming that Ms Retiree bought one lot or 1,000 units at the initial public offering (IPO) for a total sum of $960. For the whole of 2003, she received $57 in dividends. However in that year, CMT also had a one-for-10 rights issue. To subscribe for her entitlement, Ms Retiree would have to cough out $107.

In 2004, she would received $89 for the total number of CMT units she owned. That year, CMT had another rights issue, also one-for-10. The exercise price was higher at $1.62. To subscribe, Ms Retiree would have to fork out $178.

In 2005, CMT again had another fund raising exercise via rights issue. Ms R would pocket $124 in dividends but in that same year, had to return $282 back to the Reit.

In the next three years - 2006 to 2008 - Ms Retiree felt rich and happy. She merrily banked in her quarterly distributions which amounted to $404 for her holdings of CMT. Her one lot, after three rights issues, had grown to 1,331 units.

In the following year, another $175 was distributed. But CMT wasn't going to let Ms R be happy for long. It launched a big one - a 9-for10 rights issue. To fully subscribe for her entitlement, Ms R had to empty her bank account of a whopping $982.

And you know what, the cash call came in March 2009, when the Straits Times Index fell below 1,600 points, and many retirees were dismayed to see their investment portfolios plunge by half or more. Many fret if they would have enough left in the pot to sustain their lifestyle. Having to cough up more money for a Reit was the last thing that they wanted to do!

Negative cash flow

And here's the final tally. Since its IPO until today, a holder of one lot of CMT would have received $1,264 in cash distributions. However, in all, he or she had to return $1,549 back to the Reit so as to subscribe to their entitlement of new issues. That's a net outflow of $284 per lot.

It's the same story with K-Reit Asia, Capitacommercial Trust, Frasers Commercial Trust, Mapletree Logistics, First Reit, Lippo Malls Indo Retail Trust, AIMS AMP CAP and Saizen REIT in that what was taken back from investors was more than what was given out.

K-Reit has been one of the most aggressive fund raising Reits. Had you started with just one lot when it was listed in April 2006, you would have to dish out $8,399 to subscribe to your rights issue. Distributions amounted to $1,110, resulting in a net outflow of $7,289.

For Reits with at least four years of track record, only Fraser Centrepoint, Parkway Life and CapitaRetail China have not had any cash calls.

Instead of a rights issue, Suntec Reit raised funds by issuing new units to some institutional investors at a slight discount. Existing unitholders don't have to cough out additional cash, but they would have their share of earnings diluted somewhat.

Misalignment of interests

Reits are managed by managers, and managers are paid based on the size of the portfolio that they manage. So the incentive is for the managers to continue to raise money and expand the portfolio size. Sometimes this is not done in the best interest of unitholders.

The most recent controversy was over K-Reit's purchase of Ocean Financial Centre (OFC) from its sponsor Keppel Land. K-Reit has launched a 17-for-20 rights issue to pay for the purchase which was deemed by the market to be expensive at a time of uncertain outlook and when office rental is expected to ease.

BT reader Bobby Jayaraman argued that rather than be compensated based on factors such as the value of assets, net property income and acquisition fees, Reit managers should be paid based on a combination of growth in distribution per unit and market valuation of the Reit.

'If Reit managers were paid on the basis of distribution per unit and market valuation growth, would K-Reit have bulldozed its way through the OFC acquisition like they have done?

'The day K-Reit announced the OFC acquisition, its stock price fell close to 10 per cent and has continued sliding. Yet, its Reit manager will take home significantly increased management fees while shareholders would have lost a good chunk of their capital even as they bear significantly more risk in the form of higher leverage and potential property devaluations given the uncertain environment,' he wrote to BT.

Misalignment of interests aside, there

But while Reits may not be the perfect income yielding instrument that they are made out to be, they have proven their capacity for capital appreciation. Relative to the capital ploughed in, CapitaMall Trust has rewarded its unitholders with a return of 127 per cent. Most Reits have yielded positive total returns.

Instead of buying Reits for yields, some savvy investors only buy them when they see those with good quality assets trade at sharp discounts to their book value. For example in the first half of 2009, CMT was trading at 50 per cent its book value. Today, it is not as cheap. At $1.755, CMT is now trading at 13 per cent premium to its net asset value of $1.55.

Hence, valuation metrics which apply to a typical asset heavy stock would apply to Reits as well.

Read? Right issue back again (6)

Createwealth8888:

The only issue is the right issues and make sure you fully understand the right issue especially when you are very firm in your mind that you are investing for long-term e.g. more than 10 years for dividends.

When you made money from trading the Reits due to market sentiment arising from the right issue announcement that is trading gain. It has nothing to do with dilutive factor of right issues.  Get it?

You can only hear success stories loud and clear!

Just for Laugh ....

I have been crawling the cyber space day and night for more than 10 years for investment ideas and reading postings and articles from  investors and traders. We can only hear their success stories loud and clear. It is nothing wrong to boast your success stories as it is human nature to feel good. If you don't feel good then you need to seek an appointment with Research Department in IMH. Your brain is a good research material for the researchers there.

We can only hear whispers of failures. Why? Losers are too depressed to talk about it so we don't get to learn from them.

The latest example is shorting of CDL by a local Guru. Win money eats Bread. Lose money drinks Kopi.

Whenever you read in the cyber space, your mind must open up like a parachute. The parchute may ensure you safety down to Earth only it is wide open; anything else you are likely to be dead! Get it?

Why Bread? Why Kopi?

???
???
???


BreadTalk. KopiTiam.

Kids are expensive liabilities! (2)

Read? Kids are expensive liabilities!

Do you like this post by LP? Starting a new friendship with an old friend

If you like this post by LP and fully agree that this friendship is great. Walk your talk! Have your future friend or friends writing similar post in another new technology in 30 years time. hee hee.

I have cash but I don't like to pay up!

Just for Laugh ...

You have plenty of cash rotting in the bank and still don't like to pay up. Why? Common reason for doing so as you want to maintain maximum liquidity for investment opportunity. You like to think that you are savvy investor who knows how to spot good investment opportunity when it arises.

BTW, is your invertible cash rotting in the bank in 2009? So you are still waiting for more opportunities in 2012/13? NATO again?

Cash rotting in the bank and at the same time helping to pay banker's salary and bonus is worth waiting for? The idea of investing is simple but never easy!

We don't like to strongly believe that we will drop dead suddenly

Just for Thinking ....

We don't like to strongly believe that we will drop dead suddenly. But, if we do; then our thinking over saving, spending, insurance, investment, debts and work-life balance may significantly change direction going forward in our life.

Read? Regrets of Dying

You Will Never Know It May Make A Difference In Someone's Life or Thinking (3)

You may like to know what is the most lesson learnt from this blog by other blog readers.

Read? You Will Never Know It May Make A Difference In Someone's Life or Thinking (2)

One blog reader, CH said that he has learned the most important lesson here: Performance measurement. It is this measurement that should matter most.

Read more? Measure your investment performance

Why do you want to spend some of your time (the most precious commodity in your life)  to invest your hard-earned money?

There is only one reason to do it that is to grow your money and the rate of growing this money cannot be ignored. It must be diligently tracked to give you periodic and consistent feedback on your investing performance. With this feedback, you can then objectively review and revise your 3M - Method, Mind, and Money to meet your investing goals. Without measuring CAGR or XIRR on your investment portfolio, you may be drifting along your investing journey by feeling good and positive about it.

CapitaLand sets up US$180m China real estate development unit

By CARINE LEE


CapitaLand Limited on Thursday announced the incorporation of CapitaLand Xinye (Hangzhou) Real Estate Development Co Ltd.


The wholly-owned subsidiary domiciled in China has a registered capital of US$180 million, and is principally involved in real estate development and management.

Health is Wealth???

Just for Thinking ....

Is heath = wealth???

May be not exactly true.

Good health may not significantly increase our wealth; but deteriorating health will significantly reduce our wealth and no amount of wealth spent can restore back our health. So we must take good care of our health to prevent losing too much of our wealth.

You Will Never Know It May Make A Difference In Someone's Life or Thinking (2)

Read? You Will Never Know It May Make A Difference In Someone's Life or Thinking


I have spend my past five years since Sunday, 19 November 2006 writing blog post after blog post related to investment, finance, insurance, and life.
 
If any of my blog posts has made a difference in someone's life or thinking; it willl be enough reward to me for spending some of the most precious commodity in my life in this blog. Cheers!

Singapore's inflation rate holds above 5%

SINGAPORE: Singapore's inflation rate held above 5 per cent for the fifth straight month in October.


The Consumer Price Index (CPI) rose by 5.4 per cent from a year ago, easing from the previous month's gain of 5.5 per cent.

The October reading is above market expectations of a rise of 5.2 per cent.

The CPI rose 0.4 per cent in October 2011 from the previous month.

The Department of Statistics said the CPI reading reflected mainly higher costs of accommodation, private road transport and food.

The higher cost of accommodation was due to higher imputed rentals of owner-occupied homes.

Private road transport costs were driven by a significant increase in Certificate of Entitlement, or COE premiums and higher petrol prices.


Excluding accommodation costs, the consumer price index rose by 4.1 per cent compared to the same month last year.

The Monetary Authority of Singapore's core inflation measure for October (which excludes the costs of accommodation and private road transport) rose by 2.3 per cent from a year earlier, and increased by 0.3 per cent from September.

The central bank has raised its inflation forecast twice this year, and predicts an annual gain of around 5 per cent for 2011.

The MAS expects inflationary pressures to taper off next year, and forecasts headline inflation of 2.5 to 3.5 per cent.

- CNA/ck

Four Pillars in our life to support our happiness index



Read? Catching the moments of happiness!

Read? Value has a value only if its value is valued

To support our happiness index from falling or crashing

We must be mindful and always seek ways and means to strengthen our four Pillars in our life to support our happiness index from falling or crashing.

1. Personal Health and family members health
2. Money
3. Family (more than one member and companion is counted)
4. Community (including spiritual)

Any weakness in any of these four pillars in our life may cause our happiness index to start falling soon so we should always seek ways and means to strengthen these four pillars and watch for cracks in these pillars too.

Remember we sow what we reap in life!

MAS weighs in on Reit sector debate

By JAMIE LEE


(SINGAPORE) The Monetary Authority of Singapore (MAS) may offer more regulatory guidance to the real estate investment trust (Reit) industry in efforts to boost corporate governance standards, it said yesterday.

MAS did not highlight specific companies but was responding to criticism that current rules governing the Reit sector fail to protect the interests of minority shareholders.

Central to this brewing debate is the $1.57 billion sale of Keppel Land's entire stake in Ocean Financial Centre to K-Reit Asia - a plan that was criticised by shareholders for both the timing and price. The deal was approved but through a show of hands at the shareholders' meeting - a voting system that the Singapore Exchange (SGX) is proposing to ban.

Under a show-of-hands system, each person gets a single vote regardless of the number of shares he holds. The alternative of poll voting gives each shareholder voting rights according to the size of his shareholding.

'The current code on collective investment schemes under MAS, which regulates Reits, is not robust enough to prevent unscrupulous Reits from taking advantage of minority shareholders,' said reader Bobby Jayaraman in a letter to The Business Times on Nov 16.

'The major culprit is the incentive system for Reits, which does not always align with shareholder interests,' he added.

Rather that be compensated based on factors such as the value of assets, net property income and acquisition fees, Reit managers should be paid based on a combination of growth in distribution per unit and market valuation of the Reit, said Mr Jayaraman.

In response, MAS director of communications Angelina Fernandez said in a letter: 'MAS will consider issuing further guidance to the industry as part of our ongoing effort to enhance corporate governance in Reits and other listed entities.'

The regulator reminded companies and boards to uphold high corporate governance standards. 'Corporate governance rules and guidelines cannot envisage all possible circumstances,' Ms Fernandez said.

'When observing such rules and guidelines, companies and their boards must always bear in mind the interests of shareholders or unitholders; and not take an overly technical approach,' she added.

MAS highlighted current rules that are in place to safeguard investor interest when it comes to interested party transactions. For example, transactions that represent at least 5 per cent of the Reit's net asset value are subject to voting by independent unitholders, and two independent valuations have to be obtained - one for the Reit manager, and another for the sponsor.

Limits are also set on the sale and purchase prices, and acquisition fees paid to the manager are in the form of units that can be sold only after a year.

Cambridge Industrial Trust to acquire warehouse for S$35.5m

By CARINE LEE


Cambridge Industrial Trust on Monday announced that it will purchase an industrial building on Toh Guan Road East for a purchase consideration of S$35.5 million.

The property, a five-storey warehouse building with an ancillary office, has a gross floor area of approximately 17,917 sqm. It is a JTC leasehold estate of 30+30 years tenure commencing from February 16, 1991.

Cambridge Industrial said it believes the property will enhance its overall portfolio and further reduce its reliance of income stream on any single asset and tenant.

The Trust intends to fund the acquisition through a combination of 60 per cent cash and 40 per cent debt, and expects to use part of the proceeds from previous equity fund-raising exercises to fund the purchase.

The acquisition is expected to be completed by the first quarter of 2012.

Know thyself. Be true to it and avoid the pain within.

• STI has been dropping!
• More and more bad news coming out!
• Your portfolio also drops 20%

How are you feeling now?

1. Feel like selling away everything and keep cash and then wait for more good news to come before going back to the market.
2. Continue to be concerned; but won't put in any more money. Enough of this stock investing. It is just too difficult.
3. Put in more money as this is a great and rare opportunity presented by the market.

If your answer is 1 or 2, you may be better off in investing in low price volality, low volume and dividend paying stocks or bonds may be a good choice too. Low volume means less market speculators coming into your stocks to play your emotional roller coaster ride.

How to spot ponzi or scam investment scheme?

Just for Thinking ....

Guaranteed Return of e.g above 5% on your investment in 3 or 6 month time

The key word is Guaranteed Return.

There is no such investment in the market that can guarantee Return over 3 or 6 month and not even one year. It is certain. It is a ponzi or scam investment scheme. They either take part of your investment and return it back to you as 5% return on your investment or take part of other newer investors investment and give it to you.

How the scheme works?

You invest $10K. After 3 month, the scheme takes your $500 and return it back to you as 5% gain. When you received your own $500, you jump through the roof. You go round telling your friends and relatives how good is your investment. 5% return in 3 month. OMG! Soon your friends and relatives will get sucked into it.

If you seriously think that you have found such investment scheme that offers guaranteed good return on investment. Don't be selfish. Let me know. I want to join in too!